Saving for a down payment is potentially the biggest hurdle to homeownership among young or first-time home buyers.

Putting 20% down on a mortgage allows buyers to avoid mortgage insurance, and keep monthly payments lower, but considering that it takes an average of seven years to save a 20% down payment on the typical-valued home in America, the 20% down payment standard has become less attainable for today's home shoppers.

According to the 2018 Zillow Group Consumer Housing Trends Report, only 43% of buyers nation-wide are putting down 20% or more. Almost one-fourth of buyers (24.2%) put down only 5% or less.

Millennial buyers – the largest group of buyers – are the most likely to use multiple funding sources for their down payment. Fifty-one percent say they used a gift or loan from family or friends for at least a portion of their down payment, accounting for about one-fifth of the down payment on average. They also tap investments and retirement accounts.

For 70% of buyers nationwide, savings make up at least some portion of their down payment. Thirty-nine percent say their down payment funds came from a previous home sale, which typically accounted for about 20% of the total down payment.

Down payment trends varied in markets across the country as well. Zillow analyzed five major metro areas – Atlanta, Chicago, Washington, D.C., Phoenix and San Francisco – for buyers' decisions regarding down payments.

Atlanta and Phoenix had the smallest share of buyers, at around 30%, putting the full 20% down on a home, while 44.5% of buyers in Atlanta and 36.9% of buyers in Phoenix are only putting down 5% or less. Meanwhile, buyers in Chicago, San Francisco and Washington, D.C., are at least as likely as the typical national buyer to put down 20% or more.

Interestingly, the median mortgage payment in both Phoenix and Atlanta is $1,131 a month, which is lower than the median mortgage payments in Chicago ($1,336), Washington, D.C. ($1,850), and San Francisco ($2,158)--buyers in the three metros with higher monthly mortgage payments are more likely to put down 20% or more than those in areas with lower payments.

Metropolitan Area Median Home
Share of buyers
who put down 20
percent or more
Share of buyers
who put down 5
percent or less
United States $221,500 $1,416 43% 24%
San Francisco, CA $967,200 $2,158 51% 18%
Washington, D.C. $401,600 $1,850 44% 25%
Chicago, IL $223,200 $1,336 52% 18%
Atlanta, GA $212,800 $1,131 32% 44%
Phoenix, AZ $260,400 $1,131 31% 37%

When making a down payment, 35.9% of rural buyers put down 5% or less, compared to 24.7% of suburban buyers and 16.9% of those buying homes in urban parts of the country do the same. Urban and suburban buyers are more likely to make down payments between 6% and 19%.

"Saving up for a down payment can be tough and requires good budgeting and long-term planning, especially when for many of us the cost of rent and everyday life outpaces what we're able to put in the bank." said Zillow senior economist Aaron Terrazas in a news release. "There are many mortgage options that require less than 20 percent down, but buyers should be careful that they don't set themselves up to be underwater. Interest rates are rising, of course, but for many, waiting a bit longer and saving for a larger down payment might still be the way to go as they weigh their current stability and housing needs against their long-term futures."